Almost 36% of new homes sold in the United States during May were yet to be built, a sign that demand for housing is on the rise and that production will soon follow suit.
Bloomberg News reported that the percentage of not-yet-started homes was the highest in seven years, and that the trend will spur purchases of building materials and appliances while creating more jobs.
According to the U.S. Commerce Department, of the 45,000 new homes sold in May, 16,000, or just less than 36%, weren’t underway. A year ago, that proportion was 26%. In September 2008, it was 14%.
Stuart Miller, the CEO of Lennar, said that even if the number of new houses this year rose to 950,000, it would still fall short of the 1.2 million to 1.5 million that are needed to meet demand, according to Bloomberg. The prospect of higher mortgage rates and property prices is convincing many Americans that now is the time to buy.
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Thanks Cap'n Obvious. The housing market has been booming for awhile now. Every contractor I know is swamped with work to the point of turning it away. Homeowners are having trouble finding contractors who can fit them in. Contractors are having trouble finding live bodies to do the labor; Let alone bodies that can think a little on their own. To make matters worse, the building suppliers can't keep up with product demand.
The real question is are we heading in the right direction for the construction industry?
When I hear the news say "Homebuilding...industry...production...etc." all I think about is the corporate goons like Pulte, KB, TollBros., and the like that produce the the lowest of quality stamped houses using underpaid immigrant labor.
How does that help "the little guy" contractors that comprise the vast majority of the "Homebuilding Industry"? How does it affect the quality of american home construction? How does it change the quality of life and income for skilled trades people? Who is going to fill the labor roles?
These are the tough questions that we need the news to report on; Otherwise the only news you're telling me is that I should buy stock in Pulte before it hits another record high.
DC